NEW YORK – Bugging by Rupert Murdoch’s News of the World tabloid even reached a former deputy prime minister. Clive Irving on how Scotland Yard investigators messed up—and the wider ethical concerns.
In London the firestorm over telephones being bugged by reporters from Rupert Murdoch’s saucy tabloid, the News of the World, just escalated. This is becoming one of those scandals where the more the perpetrators want to bottle it up the more it won’t stay bottled.
The News of the World hacking raises wider concerns than just the ethics of tabloid journalism and the complicity of executives at Murdoch’s papers.
Two previous inquiries by the Yard were suspiciously casual, and in view of what has since emerged were more like white washes than investigations.
The latest investigation is led by a feisty woman, deputy assistant commissioner Sue Akers, who seems determined to clear up the mess left by her male predecessors—no matter who gets embarrassed in the process.
Wednesday night she sent out an email to people whom she now suspects had been targets—as many as 20 of them. (Previously the Yard had put the number at 10 or 12). She even said that some public figures had been misled by the Yard when seeking assurance they had not been bugged.
The case of John Prescott is particularly poignant.
This larger-than-life rumbustious politician was Tony Blair’s essential lifeline to the working class roots of the New Labour party. Blair himself had a famously tin ear for the old-time grass roots faction. Prescott flaunted the perks of office, being dubbed “Two Jags Prescott” because he owned two Jaguar luxury sedans. And in 2006 he admitted to having an affair with one of his secretaries.
The new evidence turned up by the Yard apparently shows that Prescott’s phone was hacked in the month that he confessed to this affair.
Politicians I have spoken to here in London now believe that the News of the World hacking raises wider concerns than just the ethics of tabloid journalism and the complicity of executives at Murdoch’s papers.
First, there is the issue of Scotland Yard’s serial bungling—or, worse, of its self-restraint for fear of annoying a powerful media baron. And second there is the issue of how secure the phone conversations of senior ministers are. Tabloid reporters are not particularly regarded as masters of technology. If they can bug the mighty so easily, what about the real pros working for foreign governments or terrorist groups?
NEW YORK (TheStreet) — As intellectual property becomes an ever-sharper point of contention in U.S.-Chinese relations, federal authorities are ramping up their efforts to combat economic espionage and trade-secret theft by Chinese nationals.
From General Motors(GM) to Ford(F), from Dow Chemical(DOW) to DuPont(DD), from Motorola(MOT) to Sun Microsystems, from Boeing(BA) to Northrop Grumman(NOC), dozens of U.S. companies have become embroiled in cases where employees have allegedy purloined top-secret business data — either by insiders or cyber-attack — and provided it to Chinese competitors.
Perhaps more than other Western nations, the U.S. has aggressively prosecuted cases of Chinese industrial espionage. In recent years, athorities here have been intensifying their efforts. “There’s been a lot of pressure from business and from the defense communities, both in the government and at contractors, that this is a problem,” says Sean Noonan, an analyst at Stratfor, a firm that provides research and analysis on geopolitical issues.
U.S. attorneys have filed at least eight trade-secret or industrial espionage cases related to China since 2008, more than the previous seven years combined. Those cases include both charges against individuals for intellectual property theft, as well as the more serious “economic espionage,” which the law describes as industrial spying for the “benefit of a foreign government.”
According to a report released by the Obama administration Monday, don’t expect the flurry of investigations to slow down.
In the 92-page text, which detailed the federal government’s intellectual property enforcement efforts in 2010, China loomed large.
“Over the last six months, we have heard repeated concerns about enforcement of patents and trade secrets, particularly in China,” the report read. “This year, DOJ and the Federal Bureau of Investigation (FBI) have increased their investigations and prosecutions of corporate and state-sponsored trade secret theft.”
Prepared by President Obama’s “intellectual-property czar,” a post he created just after he took office, the report said that the FBI will send a specialist agent to China later this year, charged with smoking out the illicit appropriation of intellectual property. Since September, the Department of Homeland Security’s investigative arm has had a designated agent stationed in Guangzhou working on trade-secret issues. And, in October, Attorney General Eric Holder made his visit to Beijing, specifically to hammer home U.S. worries about misappropriated intellectual property.
BHP Billiton chief executive Marius Kloppers was willing to trade secrets with the United States and feared espionage from the Chinese, Rio Tinto Ltd and the Australian government, according to an American secret diplomatic cable released by WikiLeaks and reported on by Fairfax Media.
Beginning in a June 4, 2009 meeting between Mr Kloppers and US consul-general Michael Thurston and in subsequent discussions, Mr Kloppers asked US diplomats for insights on China’s intentions and said he would be willing to trade secrets in order to obtain information on China, according to Fairfax reports on the secret US cable.
In addition, Mr Kloppers reportedly took credit for derailing the controversial plan by Chinese state-owned Chinalco to invest $23.9 billion in Rio Tinto. His claim of having personally quashed the investment came a day before the deal collapsed, the report said.
Mr Kloppers, who described himself as only nominally Australian, also reportedly complained about surveillance and even espionage by the Chinese, Rio Tinto and the Australian government, describing doing business in Melbourne as being similar to playing poker when everyone can see your cards, Fairfax reported.
The cables describe Mr Kloppers as saying the Australian government was wary of too much Chinese investment and would prevent Chinese state-owned firms from owning Australia’s largest mining companies such as BHP, Rio Tinto and Woodside Petroleum Ltd, according to Fairfax.
“Clearly frustrated, Mr Kloppers noted that doing business in Melbourne (BHP’s Australian headquarters) is like ‘playing poker when everyone can see your cards’,” it quoted a US envoy to Australia, Michael Thurston, as saying in a cable.
“(Mr Kloppers) complained that Chinese and industrial surveillance is abundant and went so far as to ask consul-general (Thurston) several times about his insights into Chinese intentions, offering to trade confidences,” the cable said.
BHP Billiton declined to comment.
BHP Billiton and Rio Tinto each count China as their biggest markets but relations with China have sometimes been tense, especially in the iron ore market which Rio Tinto and BHP Billiton dominate along with Brazil’s Vale .
Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.
Their arrest at the height of fraught 2009 iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.
BHP Billiton had already riled Chinese steel mills with its 2008 bid to take over Rio Tinto, though BHP Billiton later dropped its offer in the face of stiff global opposition among competition regulators. BHP Billiton upset the mills again in 2009 with a proposed iron ore joint venture with Rio Tinto, a deal that also floundered over anti-competition concerns.
Between those two failed attempts to forge a BHP Billiton-Rio Tinto alliance, Chinese state-owned metals conglomerate Chinalco proposed a $US23.9 billion partnership with Rio Tinto, which Rio Tinto initially accepted, but later rejected.
Mr Kloppers took personal credit for quashing that deal, according to Wikileaks, Fairfax reported.
“Australia does not want to become an open pit in the southern-most province of China,” Mr Kloppers said at the time, according to the report.
Preventing cyberattacks is impossible, but governments and businesses can and should be able to stop attackers from stealing data, a computer security specialist says.
There is “nothing in the world you can do” to prevent attacks such as the one that penetrated computer systems in three Canadian federal government departments, said Stephen Northcutt, president of the SANS Technology Insitute, a security training facility in Bethseda, Md.
If a hacker penetrates the security of a computer system, “that’s bad, but it’s not terminal,” Northcutt says.
“Until the data actually gets out of your organization and into the hands of your adversary, you haven’t lost.”
Unfortunately, in the case of the recent attack, hackers are believed to have stolen sensitive government information.
Northcutt applauded the Canadian government for responding to the attack, which was detected in January, by disconnecting its computers from the internet.
He said that is a good move if you believe your system has been successfully compromised and the attack is ongoing.
The next step is to bring in experts who can find the malware responsible for the attack and help figure out where the data is headed.
Northcutt added that most organizations never even detect when a cyberattack is underway. Partly, that is because security systems tend to monitor data entering rather than leaving the system.
“It’s a big part of the problem,” he said. But he added that people are starting to recognize that and install software to monitor data leaving the system through strange routes like unsecured ports.
Organizations should, of course, also be trying to prevent attackers from getting in to begin with, he said.
He recommends implementing software that only allows a certain “whitelist” of approved programs to be installed on computers or tracks the programs that are installed, in order to prevent malicious software from taking root.
Adam Wosotwosky, principal engineer for internet security firm McAfee, said its not unusual for organizations loosen company-wide security measures for a select group of executives — something he recommends against.
“When you open up a back door like that, you’re opening a back door to all your hackers.”
Wosotowsky also suggests keeping web browser software up to date to minimize the chance that browsers will automatically download malware from malicious websites that employees have been lured to visit.
Companies can also ban their email system from transferring any executable files — the form that a lot of malware takes.
“There are other ways to transfer executable files,” Wosotowsky said.
Both he and Northcutt said that, in addition to technological defences, it’s important to educate employees to prevent successful phishing.
For example, Wosotowsky said, they need to know that all the text in an email can be “made up,” and that the person it appears to be from may not have sent it.
Northcutt said a number of U.S. government organizations, including the New York State government, have started “inoculation” campaigns that educate employees about security threats and hold occasional drills.
“From time to time, we need to send a note to ourselves — and see how many people fall for it,” he said.
He estimated that only five per cent of organizations actually do that.
But both he and Wosotowsky also acknowledge that technological measures to detect attacks are crucial even when employees are educated.
“We can’t get every single employee to do the right thing,” he said. “Humans make errors.”
The head of mining giant BHP Billiton (Hamburg: BHP1.HM – news) has confirmed he harboured concerns
about Chinese and competitor espionage on his business, citing it as a
reason behind his push for market pricing of key commodities.
Marius Kloppers, BHP’s chief executive, made his comments after the Sydney
Morning Herald said it saw Wikileaks cables that suggested Mr Kloppers
had offered to share intelligence about China with US authorities.
Asked on Wednesday to confirm whether he was concerned about espionage from
China and from competitors such as rival miner Rio Tinto (Berlin: CRA1.BE – news) , Kloppers told an
earnings briefing: “I would rather like to put that in a positive.”
“One of the reasons we have pushed so hard for market-clearing prices is
so that these sorts of things are not a concern, because if you sell your
product at the market-clearing price, that everybody can read off screens,
it minimises any impact of differential information that the one party or
the other may hold,” he said.
According to the Herald , Mr Kloppers said he would exchange information
with US diplomats in 2009, as he detailed the high level of surveillance
that Chinese authorities had on his company. China is BHP’s largest
customer.
Rival mining groups were also accused of spying on BHP’s activities. “Clearly
frustrated, Kloppers noted that doing business in Melbourne is like ‘playing
poker when everyone can see your cards’,” Michael Thurston, US
consul-general to Australia, said in a cable.
Mr Kloppers “complained that Chinese and industrial surveillance is
abundant and went so far as to ask consul-general [Thurston] several times
about his insights into Chinese intentions, offering to trade confidences,”
the cable said. BHP declined to comment on the report.
Price negotiations between China and mining companies were particularly
fraught in 2009 as commodity prices recovered from the credit crunch. This
led to the collapse of price discussion relating to iron ore, a vital
ingredient in steel making.
Four Rio Tinto negotiators were eventually convicted of stealing commercial
secrets given long jail sentences, including Australian national Stern Hu.
Objections from Chinese steel mills also contributed to BHP and Rio abandoning
their proposed iron-ore joint venture in the Pilbara region of Western
Australia last year.
The revelations come as BHP, the world’s largest mining company, unveiled
a 72pc surge in first-half profit .
Rising commodity prices have seen the company’s cash coffers swell and
investors are demanding the group announces plans for its cash mountain.
Some investors have complained that they want a substantial amount of cash
returned, but it is believed that Mr Kloppers is keen to make an acquisition
following the group’s failed $40bn bid for PotashCorp last year.
Bugging by Rupert Murdoch’s News of the World tabloid even reached a former deputy prime minister. Clive Irving on how Scotland Yard investigators messed up—and the wider ethical concerns.
